The SPX is virtually unchanged at 2139 after 17 months of trading following the long-term monthly RST 2135 high on 5/15/15, with the major 5 RSI monthly negative divergence. I said that the risk reward was not positive then, and to significantly cut back long exposure on any buy and hold SPX index portfolios. I have not changed my opinion on long-term portfolios.
I said that trading the monthly O/B and O/S opportunities was the best option for those of you that trade the markets, in addition to your long term strategies. The day trading opportunities are frequent on the Volatility Band spikes, especially after the opening and during the 1st hour of trading, which, as you know if you have followed me over the years usually provide the best trading opportunities.
The SPX made an 1867/1871 double bottom [Aug-Sept] following the 2135 RST high, or a -12.6% decline into the 2015.75 Pi 8.6 year cycle time zone. The monthly O/S Pi reversal advanced +13.6% and made a .618 Fib RT to 2116.48 before a -14.4% decline to a lower double bottom low at 1812/1810 [Jan-Feb 2016] and -15.2% from the 2135 RST high.
I guess that was enough of a shakeout for Yellin, especially with her fellow Democrat Clinton running for President, without which she would be relieved of her duty to put it nicely. The subsequent SPX reversal was +21% from the last double bottom, and that took out the RST 2135 high by +2.8% to 2194. The RST high got taken out in 14 mo’s and has trended down since the 2194 8/15/16 high.
The Index traded down to 2115, and just above the 200 DEMA on 10/13/16, which put it in a S/T O/S condition. There is no way that Yellen and the US Gov’t. will let the SPX do anything nasty now before they “put” Clinton in office, which is a lock at this point.
To review how to calculate the volatility bands and get the data, you can view the March 2016 commentary by clicking here.